chapt 14-19

Some contracts state that the contract needs to be performed to the satisfaction of another. The "other" is typically _______

A reasonable person

In a typical adhesion contract, ___________

A seller takes advantage of a buyer

The condition precedent precedes the ________ duty to perform.

Absolute

A usurious contract involves _________

An illegally high rate of interest

The _____ assigns rights to the ________ . Once the rights are assigned, the ______ must perform for the new _______

Assignor, asignee, obligor, obligee

Which of the following types of contracts are NOT usually standard-form contracts?

Babysitting agreements

A(n) ________ beneficiary is a third party who benefits from a contract when one party (promisor) promises another party (promisee) to perform a duty that the promisee owes to the third party.

Creditor

Most contracts require that all aspects be completed as expressly stated in the contract. Any deviation from strict performance breaches the contract and ________ the other party's obligations to perform.

Discharges

Mistakes can be mistakes of ______ , which allow a contract to be voided or mistakes of ________ , which do not.

Fact, Value

In order to have substantially performed a contract, the party must have performed in _______ . Intentional failure to comply with the contract terms is a _______ of the contract.

Good faith, breach

Sometimes, the buyer of goods breaches a contract before the seller produces the goods. If that is the case, the seller can receive __________ as compensatory damages.

Loss profits

In order for a bilateral mistake to allow the parties to rescind the contract, the mistake must be ____ and must be about _____ fact.

Material, the same

The duty to perform under a contract ______

May be conditional

A ______ breach does not discharge the nonbreaching party from the contract, and, once the ______ breach has been cured, the nonbreaching party must resume performance.

Minor, Minor

Concurrent conditions are NOT present when _________

One party will perform her or his duties after the other party

When an occurrence or event makes performance temporarily impossible, ________

Performance is temporarily suspended

If a contract enriches the dominant party, the courts will often _______ undue influence.

Presume

Under the Uniform Commercial Code (UCC), evidence of ______ can be used as evidence for interpreting an otherwise valid written contract.

Prior dealing

Traditionally, only parties to a contract had rights and liabilities under the contract. This was known as the principle of ______

Privity of contract

In addition to being available in a ________ situation, ________ might be available when there has been misconduct by a party in a special relationship.

Recission, restitution

When one party breaches a contract, the other party can choose from one or more of several _______ . Generally, a court will grant money, a remedy at _______ , unless money is not sufficient. If that is the case, the court will grant a remedy in ______

Remedies, law, equity

When a party is fraudulently induced into a contract, that party can ____

Rescind the contract

Which provision of the Uniform Commercial Code allows the courts to refuse to enforce a contract or clause on the basis of unconscionability?

Section 2-302

A buyer who offers to pay for goods has ______ payment and can therefore demand delivery of the goods.

Tendered

In a construction contract, when the contractor breaches, the damages are measured as _______

The cost of completion

The ______ requires that the sale of goods for over _______ must be in writing, but that the only requirement other than a description of the goods is the _______

Uniform commercial code, $500, quantity

A knowing relinquishment of a legal right is called a _______

Waiver

Marte hires Pilar to represent her in a lawsuit. Pilar is not a licensed attorney, although she claims to be one, so the contract between Marte and Pilar _________________

Will not be enforced

Matthew has a contract to sell a piece of real estate to Betty for $35,000. Betty breaches the contract, and Matthew immediately sells the land to someone else at the best price he can get: $31,000. Matthew can recover: a. $4,000 as the difference between the market price and the contract price. b. specific performance. c. $35,000 as the contract price on the land. d. nothing because he was able to sell the land to someone else.

a. $4,000 as the difference between the market price and the contract price.

Jed tells his ailing mother that unless she lends him money for a business investment he will never see her again. She agrees but later changes her mind and asks for her money back. Jed claims that they have formed a binding contract. Why might the contract be voidable? a. Because of undue influence. b. Because of duress. c. Because of a unilateral mistake.

a. Because of undue influence.

Which two of the following typically include a liquidated damages clause? a. Construction contracts b. Teacher contracts c. Contracts for the sale of goods d. Contract for college tutoring e. Contracts for real estate

a. Construction contracts c. Contracts for the sale of goods

Select the two types of contract provisions that limit remedies. a. Exculpatory clauses b. Statute of limitation clauses c. Antirestitution clauses d. Limitation of liability clauses e. Statute of Fraud clauses

a. Exculpatory clauses d. Limitation of liability clauses

________, ________, ________, and ________ are examples of businesses whose exculpatory clauses to limit their liability are often enforced by courts. a. Golf-cart concessions b. Racetracks c. Skiing facilities d. Skydiving organizations e. Emergency health care f. House painting g. Catering

a. Golf-cart concessions b. Racetracks c. Skiing facilities d. Skydiving organizations

Select the three situations where scienter may be found. a. Knowingly making a misstatement of fact b. Accidentally telling the other party incorrect information c. Making a statement recklessly without verifying its truth d. Implying a statement is based on personal knowledge when it is not e. Verifying information through personal observance

a. Knowingly making a misstatement of fact c. Making a statement recklessly without verifying its truth d. Implying a statement is based on personal knowledge when it is not

Craig was trying to sell his sick dog to Lisa. The dog's illness was not detectable from simply looking at, or playing with, the dog. Craig provided Lisa with documentation that showed the dog had received its required shots and had been to the veterinarian on a regular basis for checkups, but he did not mention the illness. Lisa bought the dog, who died two weeks later. Lisa sued for fraudulent misrepresentation. Who wins? a. Lisa wins, because Craig committed fraudulent misrepresentation by hiding the illness. b. Craig wins, because there is no duty to provide information. c. Craig wins, because the illness was not a material fact. d. Lisa wins, because there is an implied warranty on the sale of any animal and its death that soon triggers that warranty.

a. Lisa wins, because Craig committed fraudulent misrepresentation by hiding the illness.

Select the three elements typically found in fraud. a. Misrepresentation of material fact b. Mistake of material fact c. Accidental deception d. Intent to deceive e. Justifiable reliance on the misrepresentation f. Actual reliance (whether justifiable or not) on the misrepresentation

a. Misrepresentation of material fact d. Intent to deceive e. Justifiable reliance on the misrepresentation

There is one instance when an opinion may create fraudulent misrepresentation. Select the two criteria for this situation. a. Naïve purchaser b. Savvy purchaser c. Opinion of an expert d. Opinion of the average person e. Opinion of a judge f. Demanding purchaser

a. Naïve purchaser c. Opinion of an expert

Bill and Henry sign a contract for Bill to build a house for Henry by December 20. On December 20, the house is complete with the exception of the crown molding around the living room ceiling and a final coat of interior paint. In the meantime, Henry has decided that he does not want a new home. He tells Bill that Bill has breached the contract and Henry no longer is obligated to perform. Is Henry correct? a. No, because Bill substantially performed. b. Yes, because Bill breached the contract by not having the home completed on time. c. No, because Bill perfectly performed. d. Yes, because Bill can always sell the home to someone else after it is finished.

a. No, because Bill substantially performed.

Nicole has a contract to buy fourteen cases of hammers from Tyler. Tyler breaches the contract. Even though she can get similar hammers somewhere else, Nicole wants to sell his hammers because she secretly likes his logo and thinks it will draw customers in to her store. If she sues for specific performance, will she win? a. No, because she can get similar hammers elsewhere. b. Yes, because she likes his logo and cannot get that logo somewhere else. c. Yes, because he breached the contract and can be made to deliver the hammers. d. No, because Tyler does not want to give her the hammers.

a. No, because she can get similar hammers elsewhere.

Sandy guarantees to pay Lester any debts Albert incurs with Lester. Sandy makes this guarantee because she knows that if she does not, Albert will run up a large debt with Lester and be forced to declare bankruptcy. Albert would then most likely be unable to pay Sandy what he owes her. Does this contract have to be in writing? a. No, under the main purpose rule. b. Yes, under the evidentiary rule. c. Yes, under the first-definer rule. d. No, under the nuptial rule.

a. No, under the main purpose rule.

Select the three legal requirements for mutual rescission to take place. a. Offer b. Acceptance c. Consideration d. Legality e. Anticipation f. Impossibility

a. Offer b. Acceptance c. Consideration

Giving notice is not legally required to establish the validity of an assignment, but it is a good idea for which of the following two reasons? a. Priority issues may arise when more than one person receives an assignment of the same rights. b. There is potential for fraudulent misrepresentation. c. The assignor might run off with the funds. d. There is the potential for discharge by performance to the wrong party.

a. Priority issues may arise when more than one person receives an assignment of the same rights d. There is the potential for discharge by performance to the wrong party.

Sierra offers to sell Alyssa a Scottish terrier puppy for $800. Alyssa and Sierra do not discuss the dog's ancestry, but Alyssa believes that the dog came from champion lines and agrees to the price. Alyssa later discovers that the puppy is worth only $200. Can Alyssa rescind the contract based on her mistake? a. Probably not, because Alyssa made a mistake about the dog's value, not a mistake about a material fact. b. Probably so, because Alyssa made a mistake about a material fact. c. Yes, because Alyssa had a duty to investigate, which she failed to perform. d. Yes, because the dog was clearly not worth $800.

a. Probably not, because Alyssa made a mistake about the dog's value, not a mistake about a material fact.

Promissory estoppel and the doctrine of partial performance both require: a. Reasonable reliance. b. Unreasonable reliance. c. Fraudulent misrepresentation. d. Admissions.

a. Reasonable reliance.

A judge ruled that Ron was mentally incompetent, placed him in a hospital, and appointed a guardian. Ron escaped from the hospital and purchased a recreational vehicle. In this situation: a. Ron's contract was void from the start. b. Ron can avoid the contract only if the salesperson knew he was mentally ill. c. Ron has a valid contract. d. Ron cannot avoid the contract as long as he had sufficient funds to pay for the vehicle.

a. Ron's contract was void from the start.

If the parties to a contract attach materially different meanings to a term, a court may determine that there is no true meeting of the minds and allow which of the following? a. The contract to be rescinded by either party b. The contract to be enforced by either party c. The contract to be reformed to be more clear

a. The contract to be rescinded by either party

If Juan is buying a tract of land from Ken, in which of the following ways would the legal description NOT be considered part of the contract? a. The legal description is written on a separate piece of paper and mailed separately from the contract. b. The legal description is written in the contract itself. c. The legal description is written on a separate piece of paper and attached to the contract with a paper clip. d. The legal description is written on a separate piece of paper not attached to the contract, but in the same envelope.

a. The legal description is written on a separate piece of paper and mailed separately from the contract.

A collateral promise is one made by a third party to assume the debts or obligations of a primary party to a contract if the primary party does not perform. a. True b. False

a. True

A collateral promise, or secondary promise, is one that is ancillary (subsidiary) to a principal transaction or primary contractual relationship. a. True b. False

a. True

A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable. a. True b. False

a. True

A contract must be in writing if it cannot be completed within one year of the date on the contract. a. True b. False

a. True

A primary obligation and a collateral promise are the same. a. True b. False

a. True

A waiver prevents the nonbreaching party from declaring that the contract has terminated or been rescinded. a. True b. False

a. True

A writing can consist of any order confirmation, invoice, sales slip, check, fax, or e-mail, or such items in combination. a. True b. False

a. True

A written contract need not consist of a single document in order to constitute an enforceable contract. a. True b. False

a. True

Allowing a third party to sue the promisor directly circumvents the "middle person" and thus reduces the burden on the courts. a. True b. False

a. True

Because persons are assumed to be reasonably intelligent, courts rarely come to their aid just because they have made foolish bargains. a. True b. False

a. True

Compensatory damages replace what was lost because of what the breaching party did and, for this reason, are often said to "make the person whole." a. True b. False

a. True

Conditions subsequent operate to terminate a party's absolute promise to perform. a. True b. False

a. True

Contracts for the sale of goods only qualify for specific performance if the goods are unique. a. True b. False

a. True

Contracts to commit an immoral act, such as selling a child, and contracts that prohibit marriage are contrary to public policy. a. True b. False

a. True

Courts generally assume the existence of contractual capacity. a. True b. False

a. True

Courts may imply conditions from the purpose of the contract or from the intent of the parties. a. True b. False

a. True

Duress is both a defense to the enforcement of a contract, as well as a ground for the rescission of a contract. a. True b. False

a. True

Duties cannot be assigned, but they can be delegated. a. True b. False

a. True

Even though fraud is a tort, it is also a contract principle related to voluntary consent. a. True b. False

a. True

Every state has a statute specifying what types of contracts must be in writing; this is often called the Statute of Frauds. a. True b. False

a. True

Exculpatory clauses release a party from liability in the event of monetary or physical injury no matter who is at fault. a. True b. False

a. True

Gambling is the creation of risk for the purpose of assuming it. a. True b. False

a. True

Generally, compensatory damages are reduced by any loss that the innocent party has avoided. a. True b. False

a. True

Generally, conditions precedent are common and conditions subsequent are rare. a. True b. False

a. True

If a contract is divisible into legal and illegal portions, a court may enforce the legal portion but not the illegal one, so long as the illegal portion does not affect the essence of the bargain. a. True b. False

a. True

If any insurance company violates a statute when selling insurance, the purchaser can still enforce the policy and recover from the insurer. a. True b. False

a. True

If no time for performance is stated in the contract, a reasonable time is implied. a. True b. False

a. True

If the contract is only partially integrated, evidence of consistent additional terms is admissible to supplement the written agreement. a. True b. False

a. True

If the parties do not expressly discharge the old contract when writing a novation, the old contract will be impliedly discharged if the new contract's terms are inconsistent with the old contract's terms. a. True b. False

a. True

If there is an innocent misrepresentation, the innocent party may rescind the contract, but not sue for damages. a. True b. False

a. True

In most contracts, promises of performance are not expressly conditioned or qualified. Instead, they are absolute promises. a. True b. False

a. True

In situations of commercial impracticability, the added burden of performing not only must be extreme, but also must not have been known by the parties when the contract was made. a. True b. False

a. True

Legal obligations arise under the doctrine of quasi contract because the law considers that the party accepting the benefits has made an implied promise to pay for them. a. True b. False

a. True

Many contracts have provisions that limit remedies for breach to replacement, repair, or refund. a. True b. False

a. True

Mentally incompetent people and minors can be susceptible to undue influence. a. True b. False

a. True

Most adhesion contracts are standard-form contracts that contain fine print provisions which shift a risk ordinarily born by one party to the other. a. True b. False

a. True

Negligent misrepresentation occurs when a party gives incorrect information about a material fact, believing it is true because of a lack of care in investigating the information. a. True b. False

a. True

One dollar is a common amount for nominal damages. a. True b. False

a. True

Oral evidence may be introduced in all cases to show that the contract was voidable or void. a. True b. False

a. True

People are assumed to know the law; therefore, if a nonexpert lies to someone about the law, it is not misrepresentation. a. True b. False

a. True

Punitive damages are rarely awarded in contract cases. a. True b. False

a. True

Sometimes courts enforce oral contracts that should be in writing when partial performance is an unmistakable indication that one party believes there is a contract. a. True b. False

a. True

The assignee's rights are subject to the defenses that the obligor has against the assignor. a. True b. False

a. True

Under the Uniform Commercial Code, courts allow the introduction of practices and customs generally allowed in a particular industry to shed light on the meaning of certain contract provisions. a. True b. False

a. True

Under the Uniform Commercial Code, oral contracts for customized goods may be enforced in certain circumstances. a. True b. False

a. True

When a bilateral mistake occurs, either party may cancel the contract. a. True b. False

a. True

When a contract has been partially performed, and the parties cannot be returned to their positions prior to the contract's formation, a court may grand specific performance a. true b. false

a. True

When a party has been the victim of fraudulent misrepresentation, he may collect damages even if he has suffered no harm. a. True b. False

a. True

When one party has no reason to know that a contract is illegal, that party can often recover any benefits conferred in a partially executed contract. a. True b. False

a. True

Your uncle tells your boyfriend he will pay him $30,000 if he marries you. Such a promise must be in writing to be enforceable. a. True b. False

a. True

Normally a waiver does not extend to subsequent defective performance. Under what circumstances will a waiver, in fact, extend to future defective performance? a. When a pattern of conduct that waives a number of successive breaches occurs. b. When the new breach is completely unrelated to the previous breach. c. When the contract specifies that no breach can occur.

a. When a pattern of conduct that waives a number of successive breaches occurs.

Karl buys a new Volkswagen and signs a contract with Volkswagen saying that he will never sue the company for any personal injuries he may receive as a result of a faulty car. In exchange, Volkswagen reduces the price of the automobile by $6,500. This type of contract provision is: a. an exculpatory clause. b. a liquidated damages clause. c. a dormant commerce clause. d. a revisionary clause.

a. an exculpatory clause.

Judge Macy has reviewed a contract between Martin and Rowan and has determined that the written terms of the contract represent the final agreement between the two parties. According to Judge Macy, their contract is: a. an integrated contract. b. an incomplete contract. c. a prenuptial contract. d. a parol contract.

a. an integrated contract.

Hineki buys an expensive tablet device to celebrate his seventeenth birthday. Two weeks later, his father insists that he return it. Hineki's attempt to return the tablet will: a. be successful, because he acted within a reasonable time. b. be unsuccessful because he waited too long. c. be unsuccessful unless he obtains court approval.

a. be successful, because he acted within a reasonable time.

Westin wants to borrow $1,000 from Missy to help pay his deposit at his new apartment. Missy says she will agree to lend him the money, only if Westin promises to repay her within six months and if Westin's friend, Betty, promises to pay if Westin fails to do so. If Betty agrees to the arrangement, Betty's promise is called a: a. collateral promise. b. mutual promise. c. unified promise. d. limited promise.

a. collateral promise.

George is a minor who lives on his own. He orders clothing from FastShop. George later wants to disaffirm the contract. George can: a. disaffirm the contract, but must pay for the reasonable value of the goods. b. disaffirm the contract because this contract is unconscionable. c. disaffirm the contract and keep the clothing without payment because he is a minor. d. not disaffirm the contract.

a. disaffirm the contract, but must pay for the reasonable value of the goods.

Shaina hires Kieran to take her senior pictures and touch them up "subject to Shaina's satisfaction." Kieran takes the pictures and touches them up. Shaina is legitimately happy with the work, but spent the money she was going to use for the pictures on other things, and claims that she is not happy with the work. If there is evidence of this, Shaina: a. has to pay Kieran for the work if the work would satisfy a reasonable person. b. does not have to pay Kieran for the work because the contract is void. c. does not have to pay Kieran for the work. d. has to pay Kieran for the work because Kieran completed the work and "approval" clauses are illegal.

a. has to pay Kieran for the work if the work would satisfy a reasonable person.

Paul goes to a bar, has seven shots of whiskey, and then goes to an electronics store and buys a $2,500 stereo system. If he later wants to avoid the contract based on his intoxication when he made the purchase, he will need to prove that: a. he lacked the mental capacity to enter into the contract. b. the store clerk knew he was intoxicated. c. a reasonable person would have known that he was intoxicated. d. his capacity to act would be classified as "legally unstable."

a. he lacked the mental capacity to enter into the contract.

In order to avoid a contract for the sale of a car based on mental incapacity, a party must prove that: a. he or she lacked adequate mental capacity at the time of the purchase. b. the salesperson talked him or her into buying the car. c. a court had previously judged him or her to be incompetent.

a. he or she lacked adequate mental capacity at the time of the purchase.

Kathy wants to buy a house at least 2,500 square feet in size. She looks at Pat's house. Pat honestly and reasonably believes the house has 2,600 square feet of floor space, and he tells her that. Kathy agrees to buy the house. When the house is measured, she learns that it has 2,400 square feet of floor space. Kathy can seek to rescind the contract on the basis of Pat's: a. innocent misrepresentation. b. fraudulent misrepresentation. c. unilateral mistake. d. mutual mistake.

a. innocent misrepresentation.

When the terms of a written contract are ambiguous and require ________, the courts allow evidence to fill in the gaps. a. interpretation b. litigation c. the Statute of Frauds d. mediation

a. interpretation

Drew and Bella bought a large lot with two homes on it, one for them and one for Bella's aging mother, Lynette. They hire an interior designer to redecorate the homes. In the contract, they refer to the second home as "Lynette's home" and state that the interior design of the home is exclusively Lynette's decision. Lynette does not sign the contract, but does send lovely thank-you notes two weeks later to the interior designer and to Drew and Bella. Lynette: a. is an intended third-party beneficiary whose rights vested when she sent the thank-you note. b. is an intended third-party beneficiary whose rights vested when the contract was signed. c. is an intended third-party beneficiary whose rights will vest when the designer meets with her to discuss plans. d. is an incidental third-party beneficiary without rights.

a. is an intended third-party beneficiary whose rights vested when she sent the thank-you note.

Agreements to rescind contracts involving the transfers of realty: a. must be evidenced by a writing. b. can be done orally or in writing. c. must be done orally.

a. must be evidenced by a writing.

Mateo and Astrid have a contract where Mateo will sell his used Ford Bronco to Astrid for $1,400. They are to trade the vehicle for cash on Tuesday. In this contract there is: a. no condition. b. a concurrent condition. c. a condition subsequent. d. a condition precedent.

a. no condition.

Egbert, who is sixteen years old, purchases a $500 video game system and a $50 computer chair from CompuStore. Egbert changes his mind and wants to avoid the contract for the video game system but not the computer chair. Egbert may: a. only disaffirm the entire contract. b. disaffirm part of the contract for the video game system as he wishes. c. may not disaffirm the contract because it is for necessaries. d. disaffirm only the computer chair because it is incidental to the contract.

a. only disaffirm the entire contract.

Beaux is discussing with Brad the purpose of the statute of frauds enacted in all states, and tells him the purpose of the law is to: a. prevent enforcement of certain contracts that are not in writing. b. prevent fraud relating to certain contracts. c. prevent the enforcement of contracts that are not signed by all parties. d. prevent a party to a contract from testifying at trial.

a. prevent enforcement of certain contracts that are not in writing.

James tells Jennie that if she can find him an original painting by G. Harvey, signed with a No. 1, he will reimburse her up to $2,500. If Jennie finds such a painting, presents it to James, and he refuses to pay, she can recover under the doctrine of: a. promissory estoppel. b. partial performance. c. admission. d. parol evidence.

a. promissory estoppel.

Mason and Chenoa orally agree to a contract in which Mason will replace the fixtures in Chenoa's bathroom. In exchange, Chenoa agrees to cut Mason's hair every six weeks for the next two years. Mason performs his side of the bargain, and Chenoa cuts his hair on schedule for six months. Then she sells her house and moves 2,000 miles away. Mason can seek recovery based on: a. quasi contract. b. specific performance. c. reformation. d. attenuation.

a. quasi contract.

Which three of the following items are considered land according to the Statute of Frauds? a. soil b. furniture c. trees d. buildings e. cars parked in garages

a. soil c. trees d. buildings

Marie contracts to buy coffee beans for her store from Owen. The contract price is $5.00 per pound. Owen breaches the contract and delivers no coffee. Marie's damages will be: a. the difference between the market price of the coffee and the contract price. b. the difference between the contract price on the coffee and the profits that Marie may have made selling the coffee. c. the amount Owen can afford to pay. d. the amount she seeks.

a. the difference between the market price of the coffee and the contract price.

In the case of a material breach of contract, a. the nonbreaching party has the right to sue for damages resulting from the breach. b. the parties must cancel the contract and create a new one. c. the breaching party has a cause of action to sue for damages resulting from the breach.

a. the nonbreaching party has the right to sue for damages resulting from the breach.

The reasoning behind the one-year rule under the Statute of Frauds is that: a. the parties' memory of their contract terms is not reliable for longer than a year. b. most contracts are invalid if they last more than a year. c. because of the Statute of Frauds, there is no objective theory of contracts.

a. the parties' memory of their contract terms is not reliable for longer than a year.

The term alienation refers to: a. transferring ownership of land. b. transferring ownership of goods. c. transferring ownership of personal property to foreigners. d. transferring ownership of personal property to a corporation.

a. transferring ownership of land.

Justin is a fourteen-year-old music star. His father, who also serves as his agent, tells Justin that if he wants to continue to live in the family's home and be a part of the family, he should sign over fifty percent of his income to the father. Justin, who does not want to be homeless or without a family at his young age, agrees and signs the contract, giving his father fifty percent of the income. This is an example of: a. undue influence. b. fraudulent misrepresentation. c. duress. d. mistake.

a. undue influence.

Laura, who is a widow, sold a piece of property and planned to live off the proceeds during her retirement. Laura has one son, Chris, who helps take care of her home and plans to move in with her and take care of her when she is too old to take care of herself. Chris asks Laura to invest her money in his restaurant, which is faltering. He tells her that if she does not lend him the money she will never see him again. She is afraid of being alone and agrees to his request, but soon changes her mind and asks for her money back. Chris claims they have formed a binding contract. In fact, the contract may be voidable, because it was formed as a result of: a. undue influence. b. duress. c. fraudulent misrepresentation. d. a unilateral mistake.

a. undue influence.

Bill and Mary sign a contract where Bill is going to deliver 400 pairs of shoes to Mary's warehouse by noon on Tuesday. The contract states that the shoes will come on 4 wooden pallets. Bill knows that the shoes will come on 4 metal pallets. Mary's warehouse is full of goods on both wooden and metal pallets. Mary decides she does not want the shoes and sues Bill as a means to rescind the contract based on fraudulent misrepresentation. What is the outcome? a. Mary wins because Bill knowingly signed a contract containing an inaccurate and untrue statement. b. Bill wins because even though he knew he was misstating the type of pallet, it was not a material fact. c. Mary wins because wooden pallets were listed in the contract. d. Bill wins because Mary failed to underline the wooden pallet language in the contract.

b. Bill wins because even though he knew he was misstating the type of pallet, it was not a material fact.

A delegation relieves the delegator of his or her obligations to perform under the contract. a. True b. False

b. False

A writing is sufficient if it only has one signature; therefore, a contract with just one signature may be enforced against either party. a. True b. False

b. False

Adults who enter into contracts with minors can avoid their contractual duties just as the minor can. a. True b. False

b. False

All covenants not to compete are contrary to public policy, and therefore illegal. a. True b. False

b. False

All gambling contracts in the United States are illegal. a. True b. False

b. False

Article 11 of the CISG incorporates most Statute of Frauds provisions. a. True b. False

b. False

Assignments related to land transfers must be done orally. a. True b. False

b. False

Because a donee beneficiary is merely receiving a gift, a donee beneficiary cannot win a lawsuit if the contract is not performed. a. True b. False

b. False

Courts frequently engage in employment contract reformation. a. True b. False

b. False

Covenants not to compete are not permitted when they involve the sale of an ongoing business. a. True b. False

b. False

Economic need is typically sufficient to constitute duress. a. True b. False

b. False

Frustration of purpose typically involves an event that increases the cost or difficulty of performance. a. True b. False

b. False

If a party against whom enforcement of an oral contract admits that a contract for the sale was made, the contract will still be unenforceable. a. True b. False

b. False

If performance is substantial, the other party's duty to perform is excused. a. True b. False

b. False

If performance is substantial, the other party's duty to perform is mitigated. a. True. b. False

b. False

Most contracts are discharged by fulfilling conditions precedent, conditions subsequent, or concurrent conditions. a. True b. False

b. False

Ronald suffers from dementia, which impacts his brain function, but he also has healthy periods of time when his mind is fully functioning. During one of these healthy periods, Ronald enters into a contract, which he later seeks to avoid. In a majority of states, the contract will not be enforced because of Ronald's dementia. a. True b. False

b. False

Scienter is the science of determining if fraud exists. a. True b. False

b. False

Since it is common knowledge that all people make mistakes, contract law creates stability and predictability by stating that mistakes are not good reasons to void a contract. a. True b. False

b. False

Specific performance normally is granted as an option where monetary damages are sufficient but not desirable. a. True b. False

b. False

The difference between market price and contract price of land that is sold to someone else is a measure of consequential damages. a. True b. False

b. False

There are rarely any good reasons to waive a breach of contract. a. True b. False

b. False

When a minor who has entered into a contract opts to avoid that contract, she or he can choose the particular portions of the contract to disaffirm. a. True b. False

b. False

When an anti-assignment clause exists in a contract, a court will not enforce it because it is against public policy. a. True b. False

b. False

When one party is mistaken as to a material fact, it is called a bilateral mistake. a. True b. False

b. False

Which two of the following are often present in a situation where a court will grant reformation? a. Duress b. Fraud c. Mutual mistake d. Undue influence e. Trespass

b. Fraud c. Mutual mistake

What does the Statute of Frauds do? a. It sets forth a definition of fraud and outlines the punishments for fraud. b. It denies enforceability to certain contracts that are not in writing. c. It is a bridge between contract law and tort law because of the connection with fraud.

b. It denies enforceability to certain contracts that are not in writing.

Jessica verbally agrees to sell her house to Kandis, and Kandis makes a $10,000 down payment, moves in, and begins the installation of a pool in the backyard. If Jessica changes her mind seven months later and wants her house back, a court would likely find that: a. there is no sale because the contract was not in writing. b. Kandis may keep the house because there has been partial performance. c. Kandis may keep the house because more than six months have passed. d. Jessica may get her house back because one year has not yet passed.

b. Kandis may keep the house because there has been partial performance.

Which of the following conditions does NOT have to exist for the doctrine of promissory estoppel to preclude the need for a writing? a. The promisee must have justifiably relied on the promise to his or her detriment. b. The potential damages must be less than $500. c. The reliance must have been foreseeable to the person making the promise. d. There must be no way to avoid injustice except to enforce the promise.

b. The potential damages must be less than $500.

When one party anticipatorily repudiates a contract, what two options does the nonbreaching party have? a. Sue for punitive damages b. Wait until the deadline for performance to sue c. Enforce the contract immediately d. Enforce the contract but at a new price that is more favorable to the nonbreaching party e. Sue for breach of contract immediately

b. Wait until the deadline for performance to sue e. Sue for breach of contract immediately

Putnam Corporation makes a sleeping pill that is legally sold in the United States. Putnam has a contract with a chain of pharmacies to provide 4,800 cases of the sleeping pill for retail sale. One month after the contract is signed, but before any pills have been delivered, the Food and Drug Administration passes regulations that make it illegal to buy or sell the drug because it is highly addictive and has caused high levels of abuse, as well as a few deaths. Can the pharmacy chain get out of the contract? a. Yes, because performance may lead to unethical results. b. Yes, because the government's actions make it impossible to perform. c. No, because the law did make it impossible to perform, it simply increased the consequences of performance. d. No, because the law has no impact on the legality of the contract.

b. Yes, because the government's actions make it impossible to perform.

Jacob decides to sell his well-known dry cleaning business to Fred. In the sale agreement for the business, there is a clause stating that Jacob cannot open a competing dry cleaning business within ten miles of the business he is selling to Fred. This part of the agreement is known as: a. a covenant of goodwill. b. a covenant not to compete. c. a reformation. d. a covenant of satisfaction.

b. a covenant not to compete.

Eric and Chelsea sign a contract where Eric will sell his used car to Chelsea for $400. That night, Chelsea's parents surprise her with a new car. Chelsea's friend, Andrea, needs a new car. Andrea, Chelsea, and Eric sit down the next day and cross off Chelsea's name on the contract and write in Andrea's name. All three of the parties initial the changes. This is: a. a satisfaction. b. a novation. c. an accord. d. a rescission.

b. a novation.

Seven companies agree that they will not compete against each other, will set prices, and will not hire each other's employees. Such a contract will be: a. permitted as acceptable competition. b. an illegal contract in restraint of trade. c. an illegal contract only if it is a secondary part of the contract.

b. an illegal contract in restraint of trade.

Rick agrees to buy twenty acres of land from Tina. Three weeks before the deal is to close, Rick calls Tina and says: "The deal is off!" In this situation, Rick's actions constitute: a. a reformation of the contract. b. anticipatory repudiation of the contract. c. substantial performance of the contract. d. a discharge of the contract by novation.

b. anticipatory repudiation of the contract.

Jack and Scotty begin negotiations where Scotty will give Jack hockey lessons for a certain amount of money per week. While they are still negotiating the dollar amount and the number of lessons, they begin to meet weekly to have lessons. After ten lessons, Jack tells Scotty that it is clear that they are not going to be able to agree on the number of lessons or the dollar amount, so he will not participate any more. If Scotty sues Jack, the court will: a. award Scotty specific performance to make Jack finish the series of lessons agreed to. b. award Scotty a reasonable amount for the lessons he already taught. c. award Scotty nothing because there is no contract. d. award Scotty the reasonable value of a reasonable length of a contract for this type of lesson.

b. award Scotty a reasonable amount for the lessons he already taught.

A restaurant owner requires new employees to sign a covenant not to compete in the restaurant business in the entire United States for five years. Such a covenant will: a. be deemed not contrary to public policy. b. be deemed contrary to public policy because of excessive duration and unreasonable geographic restriction. c. be deemed against public policy because the restaurant business is not competitive.

b. be deemed contrary to public policy because of excessive duration and unreasonable geographic restriction.

Judy has the duty under a contract to pick up trash from Marc's front yard. Ricky owes Judy a favor, so she delegates her duty under the contract to him. It is a valid delegation. Marc: a. can refuse to let Ricky pick up the trash and demand that Judy delegate to someone else. b. cannot refuse to let Ricky pick up the trash. c. can refuse to let Ricky pick up the trash and insist that Judy do it. d. can refuse to let Ricky pick up the trash, and then charge Judy a fee for trying to delegate the duty.

b. cannot refuse to let Ricky pick up the trash.

The two basic types of performance are: a. future and past. b. complete and substantial. c. remote and local. d. repudiated and conditioned.

b. complete and substantial.

General Plastics agrees by contract to sponsor Phyllis in the next local marathon foot race, provided she loses twenty pounds by one week before the race. This is called a: a. condition consequent. b. condition precedent. c. condition subsequent. d. condition imminent.

b. condition precedent.

Shaina hires Kieran to take her senior pictures and touch them up "subject to Shaina's satisfaction." Kieran takes the pictures and touches them up, but Shaina is legitimately unhappy with the work. Shaina: a. has to pay Kieran for the work because Kieran completed the work and "approval" clauses are illegal. b. does not have to pay Kieran for the work. c. has to pay Kieran for the work if the work would satisfy a reasonable person. d. does not have to pay Kieran for the work because the contract is void.

b. does not have to pay Kieran for the work.

Max and Juli communicate by text message and Juli agrees to marry Max if he promises to take care of her daughter as well. His final text message reply says, "Of course I will take care of her if you marry me. Love you. Max." Juli saves the text messages as proof of his love for her. After they marry, Max refuses to take care of Juli's daughter. Juli attempts to enforce the agreement, but Max argues that it has to be in writing because it is a contract in consideration of marriage. If this ends up in court, the court likely would: a. not enforce the agreement because the terms are unconscionable. b. enforce the agreement, as copies of the text messages are sufficient writings. c. enforce the agreement, because it is obvious that she would expect him to take care of her daughter before she would marry him. d. not enforce the agreement because text messages would not be sufficient writings.

b. enforce the agreement, as copies of the text messages are sufficient writings.

GavelCo Insurance sells an insurance policy to Barry in the state of Colorado. GavelCo violates a Colorado state statute when doing so. Later, Barry gets into a dispute with GavelCo over coverage under the insurance policy and wants to enforce the contract. The insurance contract will be: a. unenforceable. b. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable. c. enforceable by both parties just as any other contract. d. enforceable, but only if a court finds the contract unconscionable

b. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.

England, the nation that created the original Statute of Frauds in 1677: a. repealed the statute entirely. b. has repealed all of the statute except the provisions relating to collateral promises and land transfers. c. has repealed all of the statutes except the provisions relating to the one-year rule.

b. has repealed all of the statute except the provisions relating to collateral promises and land transfers.

A lack of voluntary consent: a. is one of the four elements of a contract. b. is a defense to the enforcement of a valid contract. c. must be indicated by a clear statement in the contract to which both parties agree. d. is not a contract principle.

b. is a defense to the enforcement of a valid contract.

Hiding a material fact from the other party to a contract is considered: a. misrepresentation by words. b. misrepresentation by action. c. not misrepresentation.

b. misrepresentation by action.

Valerie contracts with Esteban, who agrees to build a stone retaining wall and drain on her property. The wall and drain are necessary to prevent erosion of her land, which is falling into the creek on her property at a rapid rate. If Esteban breaches the contract, Valerie is under a legal obligation to: a. wait until Esteban is prepared to build the wall and drain. b. mitigate her damages. c. absorb all of the costs associated with the property erosion caused by Esteban's breach. d. not take any action, because she is the innocent party and thus has no legal duties.

b. mitigate her damages.

Jeff takes all his savings and asks his broker to purchase seven different stocks. When they all fall in value, he attempts to avoid the contract by claiming that "betting" on prices of stocks is the equivalent to gambling. He will: a. avoid the contract based on the general gambling rule. b. not have legal recourse. c. be able to avoid the contract because stock market gambling is against public policy.

b. not have legal recourse.

Marta owes Carly $5,000 under a contract for maid services that Carly performed. Carly owes her landlord Alec $6,000 in rent. Carly wants to assign the right to receive the $5,000 from Marta to Alec, but the contract between Marta and Carly contains a clause prohibiting its assignment. If Carly assigns the rights anyway, a court will most likely: a. honor the clause prohibiting assignment only if the assignment was in writing. b. not honor the clause prohibiting assignment. c. allow an alienation. d. honor the clause prohibiting assignment.

b. not honor the clause prohibiting assignment.

The most common way to terminate contractual duties is by: a. novation. b. performance. c. rescission.

b. performance.

Rena contracts with Darryl to buy two horses. They agree that she will pay $2,000 for each horse. When they draw up the contract, the sales price is inadvertently changed to read $40,000 rather than $4,000. They can seek the remedy of: a. novation. b. reformation. c. recovery based on quasi contract. d. restitution.

b. reformation.

Luis contracts with Greenfield to buy several of Greenfield's dairy cows. Greenfield delivers the cows, but Luis doesn't pay for them. Greenfield may be able to have his cows returned if he seeks the remedy of: a. novation. b. restitution. c. specific performance. d. reformation.

b. restitution.

Dawn's stepson Tony tells her that he is going to lock her in a closet for a week unless she gives him a check for $20,000. Dawn is old and feeble. If she gives Tony the check and then has second thoughts about having done so, she can: a. reclaim the money, as it was a gift; there was no consideration. b. seek to avoid the contract on the basis of duress. c. claim that she was defrauded. d. seek to avoid the contract on the basis of undue influence.

b. seek to avoid the contract on the basis of duress.

Frank owes Anderson $500. Frank is the obligor. Anderson, as the obligee, assigns the right to receive the $500 to his daughter Jemma. Jemma is now: a. the assignor and cannot enforce the contract against Frank. b. the assignee and can enforce the contract against Frank. c. the obligor and can enforce the contract against Frank. d. the obligor and can enforce the contract against Anderson.

b. the assignee and can enforce the contract against Frank.

The standard measure of compensatory damages can be stated as: a. the profit to the innocent party. b. the difference between the promised performance and the actual performance. c. the difference between the contract value and the market value, with a penalty for poor behavior. d. the benefit to the breaching party for the breach of contract.

b. the difference between the promised performance and the actual performance.

A secondary obligation that does NOT have to be in writing occurs when: a. the guarantor makes the guaranty to be nice. b. the guarantor makes the guaranty to secure a personal benefit. c. the primary obligor has sufficient assets to cover the debt.

b. the guarantor makes the guaranty to secure a personal benefit.

Daniel enters into a contract that requires him to pay interest at a rate greater than the legal state maximum. The contract might be enforceable if: a. Daniel is a minor. b. the loan is for a small amount and Daniel would not be able to obtain a loan otherwise. c. Daniel's guardian entered into the contract for him. d. the contract is reasonable.

b. the loan is for a small amount and Daniel would not be able to obtain a loan otherwise.

Amjed sues Larry, a landowner on whose property Amjed was injured. Larry believes that Craig is a lawyer and hires Craig to defend him in the lawsuit. Craig is not a lawyer, so the contract between Larry and Craig: a. will be enforced only if Craig wins. b. will not be enforced. c. will be enforced unless Craig loses the case. d. will be enforced despite Craig's winning or losing of the case.

b. will not be enforced.

Misrepresentation can occur by: a. words only. b. words or actions. c. actions only.

b. words or actions.

Which of the following is NOT among the types of contracts and clauses that are often held to be contrary to public policy? a. A contract in restraint of trade b. An exculpatory clause c. A divisible, or severable, contract

c. A divisible, or severable, contract

Which of the following is not a type of discharge by agreement? a. Rescission b. Novation c. Court order d. Accord and satisfaction

c. Court order

Ferris owns an apartment in an apartment complex. The apartment complex rules require the owner of each apartment to keep it in reasonable condition, and they stipulate that failure to do so is grounds for action against the owner by the apartment complex or a tenant. Erica rents Ferris' apartment. During her first year of renting, many appliances in the apartment break, and there are repeated incidents of leaking through the roof. Ferris does nothing to fix the apartment. Erica sues Ferris, who claims he has no contractual duty to Erica. A court will likely find that: a. Erica is a donee beneficiary, therefore Ferris has a contractual obligation to her. b. Erica is an incidental beneficiary, therefore Ferris has a contractual obligation to her. c. Erica is a creditor beneficiary, therefore Ferris has a contractual obligation to her. d. Erica is a contractual beneficiary, therefore Ferris has a contractual obligation to her.

c. Erica is a creditor beneficiary, therefore Ferris has a contractual obligation to her.

Oral contracts for the sale of land fall under the Statute of Frauds, but under what circumstance might a court enforce such a contract? a. If the buyer is a minor. b. If the buyer promised to make payment on the contract next year. c. If the buyer paid part of the price, taken possession, and made permanent improvements to the land.

c. If the buyer paid part of the price, taken possession, and made permanent improvements to the land.

Keisha contracts with a broker to invest all of her savings. The year goes badly, and she loses almost all the money. She is too ill to return to work and will be penniless if she cannot avoid the contract. Which of the following applies? a. She can avoid the contract based on the general gambling rule. b. She can avoid the contract because stock market transactions are against public policy. c. She has no legal recourse. d. She can appeal to her governor for clemency.

c. She has no legal recourse.

Courts in a growing number of states place additional duties on the minor when the minor disaffirms. These duties include: a. The minor must pay a fine. b. The minor must immediately appear in court. c. The minor is responsible for ordinary wear and tear for the returned property. d. The minor is responsible for damages to the property returned. e. The minor is responsible for the depreciation of that returned property.

c. The minor is responsible for ordinary wear and tear for the returned property. d. The minor is responsible for damages to the property returned. e. The minor is responsible for the depreciation of that returned property.

Heather agrees to work for Noah for one year in his law office. Noah writes an employment contract that states that Heather is to earn $20 per hour and to work forty hours per week. Noah terminates Heather's employment after six months. Heather sues to recover what she claims are her losses. At trial, both parties discover that the contract says that Heather's hourly wage is $0.20 per hour. What can Heather and Noah do about the error? a. They can ask the court to rewrite the contract. b. They are bound by the writing under the Statute of Frauds. c. They can offer parol evidence to clarify the clerical error. d. They can offer evidence of the consideration that supported their contract.

c. They can offer parol evidence to clarify the clerical error.

Kristen enters Mikhael's art gallery and sees a painting that she loves. She says to Mikhael, "This is the most beautiful Monet I have ever seen. I will pay you $24,000 for it." Mikhael knows that the painting is not an original Monet, but is a painting by a local artist done in the style of Monet. Mikhael does not say anything to correct Kristen, but sells her the painting at the offer price of $24,000. When Kristen discovers the painting is not a Monet, can she rescind the contract? a. No, because the parties made a bilateral mistake. b. Yes, because she overpaid for the painting. c. Yes, because she made a unilateral mistake and Mikhael knew she was making the mistake and failed to correct her. d. No, because she made a unilateral mistake and contracts are never rescinded when a unilateral mistake is made.

c. Yes, because she made a unilateral mistake and Mikhael knew she was making the mistake and failed to correct her.

AJ agrees to buy Harry's pickup truck so he can pull his trailer. Both AJ and Harry believe that the truck is big enough to do the job. However, after they complete the deal, AJ finds that the truck is not strong enough to handle the trailer. The contract between AJ and Harry can be rescinded because of: a. a unilateral mistake. b. an allowable mistake. c. a mutual mistake. d. a beveled mistake.

c. a mutual mistake.

Sadie contracted with Sean, who agreed to replace the carpets in her house. Sean damaged some of the walls when he installed the carpets. Sadie did not pursue a claim against Sean for his defective performance of the contract. Sadie's actions are known as: a. a breach. b. an exculpatory clause. c. a waiver of breach. d. a penalty.

c. a waiver of breach.

Under the parol evidence rule, when the terms of a written contract are ambiguous: a. the court will conclude that the contract is legally defective. b. additional evidence is not admissible to show the meaning of the terms. c. additional evidence is admissible to show the meaning of the terms.

c. additional evidence is admissible to show the meaning of the terms.

Vince owes Colton $140,000 under a previous contract. Vince does not have the money, but does own property worth approximately $140,000. Colton agrees to accept the property instead of the money. This is: a. a satisfaction. b. a rescission. c. an accord. d. a novation

c. an accord.

Courts normally construe a contract term that "assigns all rights" as: a. an assignment of rights only. b. a delegation of duties only. c. an assignment of rights and a delegation of duties. d. neither an assignment of rights nor a delegation of duties.

c. an assignment of rights and a delegation of duties.

Rebecca owns a vacant lot. For years, it has produced nothing but weeds, which she has struggled to keep mowed. She has considered selling it, but it has decreased in value over the years, and she does not want to sell it at a loss. Lou owns the adjoining parcel of land and announced his intention to build a shopping center on the land. This would cause Rebecca's land to triple in value. Lou now says that he may not build the shopping center, and Rebecca threatens to sue if he does not go ahead with his original plans. In this situation, Rebecca is: a. a donee beneficiary. b. a creditor beneficiary. c. an incidental beneficiary. d. a vested beneficiary.

c. an incidental beneficiary.

Patrick agrees to pay Anna $25,000 in exchange for Anna taking Patrick's hazardous waste and surreptitiously dumping it on the property of a competitor. After Anna dumps the waste, Patrick refuses to pay. This contract will: a. be enforced because it has sufficient consideration and is a bargained-for exchange. b. be unenforceable due to usury laws. c. be void from the outset and thus unenforceable. d. be enforced because both parties agreed to the contract and will be held accountable to its terms.

c. be void from the outset and thus unenforceable.

Espinoza is sixteen, but looks much older. She purchases a diamond bracelet, but decides nine months later that it was unwise to spend the money, so she: a. can disaffirm this contract only if she has turned eighteen. b. can return the bracelet, but will only receive fifty percent of what she paid for it. c. can return the bracelet and get all of her money back.

c. can return the bracelet and get all of her money back.

James telephones Wanda, expressing interest in purchasing her famous chocolate ice cream. Wanda receives a purchase order for 100 gallons of ice cream from James for $300. On the appointed delivery date, Wanda delivers James 100 gallons of vanilla ice cream, stating that the contract didn't specify what flavor James wanted. James sues Wanda for the chocolate ice cream. A court will likely find that James: a. must accept the vanilla ice cream, because the contract did not specify the flavor. b. can submit evidence of the written contract because contracts can be subsequently modified. c. can submit evidence of the telephone call expressing interest in chocolate ice cream, even though the contract was ambiguous on which flavor would be purchased. d. must accept the vanilla ice cream, because the contract had an orally agreed-upon condition precedent.

c. can submit evidence of the telephone call expressing interest in chocolate ice cream, even though the contract was ambiguous on which flavor would be purchased.

Asa has a contract with Phil to provide fortune-telling services at Phil's daughter's birthday party. Phil's daughter decides she does not want to have a fortune teller at her birthday party, so Phil tries to assign the right to Asa's services to his neighbor Steve. Steve: a. can enforce the contract with Asa only if there is written documentation of Phil assigning the rights to Steve. b. can enforce the contract with Asa only if he pays double the originally agreed-upon price. c. cannot enforce the contract with Asa because rights to receive personal services cannot be assigned. d. can enforce the contract with Asa because Phil has assigned the rights to him.

c. cannot enforce the contract with Asa because rights to receive personal services cannot be assigned.

Wilbur decides to sell his collection of rare stamps through an online auction site. When he is filling out the information about his collection, he types $40 instead of $400 in the minimum price box. Wilbur does not notice his mistake until after the auction is over and someone has purchased his stamp collection for $75. Wilbur: a. can rescind the contract because the stamps are worth much more than $75. b. can claim he was defrauded. c. cannot rescind the contract based on his unilateral mistake. d. can rescind the contract because he made a unilateral mistake.

c. cannot rescind the contract based on his unilateral mistake.

Evidence of a prior negotiation that ________ a written term of the contract would not be admitted. a. supplements b. affirms c. contradicts d. involves

c. contradicts

Kyle has a credit card with a contract stipulating that he will make monthly minimum payments. Over the course of a year, he incurs $1,200 in debt that he can't pay. Because of this and other debts, Kyle files for bankruptcy. In the bankruptcy, Kyle's assets are distributed to his creditors, and the credit-card company gets $200. The bankruptcy process: a. discharges the contract by performance. b. does not discharge the contract. c. discharges the contract by law. d. discharges the contract by agreement.

c. discharges the contract by law.

Linda and Zeke sign a contract for the sale of Zeke's home to Linda. Although the price has yet to be determined, the contract states the property clearly to be sold and the date the house will be delivered to Linda. The contract: a. does not constitute a sufficient writing because it does not meet the writing requirements of the Uniform Commercial Code. b. constitutes a sufficient writing because it states the date that the house will be delivered to Linda. c. does not constitute a sufficient writing because the contract does not state the price at which the property will be sold. d. constitutes a sufficient writing because it describes the property with sufficient clarity.

c. does not constitute a sufficient writing because the contract does not state the price at which the property will be sold.

Dillon struggles with his Algebra class and, in August, decides that he needs to get a tutor for the upcoming school year. He persuades Vonda to tutor him beginning in September. They discuss Vonda's fee and hours, and agree that the arrangement will last for the entire school year, ending in May. Under the Statute of Frauds, this contract: a. must be in writing based on the one-year rule. b. must be in writing under the Uniform Commercial Code (UCC). c. does not need to be in writing. d. must be in writing because it is collateral.

c. does not need to be in writing.

Lehman is fighting the IRS, and uses the services of Morgan, a CPA. The day before Lehman must file a response to the IRS, Morgan says she will not give him the final calculations unless he pays her double what she had agreed to before. Lehman pays, but later sues. A court might find that the agreement was unenforceable because of: a. fraudulent misrepresentation. b. undue influence. c. economic duress.

c. economic duress.

Jared contracts with Wilson, who is a lawyer in a large firm, to do some legal work. There is an antidelegation clause in their contract stipulating that Wilson must be the lawyer who handles Jared's work. If Wilson becomes overwhelmed with work: a. he can delegate his work for Jared to any other lawyer. b. he can delegate some of his work for Jared to another lawyer, as long as Wilson does at least fifty percent of the work. c. he cannot delegate his work for Jared to any other lawyer, even one in the same firm. d. he can delegate his work for Jared to another lawyer, as long as the other lawyer is in the same firm.

c. he cannot delegate his work for Jared to any other lawyer, even one in the same firm.

. In order to void a contract for the sale of consumer goods based on intoxication, a person would need to prove that: a. his or her capacity to act would be classified as "legally unstable." b. the store clerk knew that he was intoxicated. c. he lacked the mental capacity to enter into the contract.

c. he lacked the mental capacity to enter into the contract.

One afternoon, after a couple of beers, Steven says that because Marvin has been a helpful neighbor, he can have a right-of-way to drive across Steven's land to get to a fishing pond. Two weeks later, while Marvin is driving across Steven's land, he hears Steven yelling, "Get off my property, you trespasser!" Marvin has: a. avoidable oral contract. b. a contract that is void because trespassing is illegal. c. no enforceable contract. d. a valid oral contract.

c. no enforceable contract.

Patrick hires Bryan, a well-known artist, to paint a mural on the wall of Patrick's restaurant. After signing the contract, Bryan calls Patrick and tells him that he is too busy to do it. Patrick wants one of Bryan's murals on the wall, so he sues for specific performance. A court will: a. not grant specific performance because a mural will not enhance the restaurant's profitability. b. grant specific performance because Bryan's murals are unique. c. not grant specific performance because it is a personal service. d. grant specific performance because painting is a mechanical act.

c. not grant specific performance because it is a personal service.

Generally, an assignment can be done: a. orally only. b. in writing only. c. orally or in writing.

c. orally or in writing

Sheryl and Davis agree that before they marry, they should have a prenuptial agreement to determine what will happen to Sheryl's fortune if they divorce or if Sheryl dies. To make their agreement valid, they must: a. do nothing. Because they will be married, their agreements are automatically valid. b. have it approved by an outside mediator. c. put it in writing. d. file it with a circuit court.

c. put it in writing.

A case involving a contract with multiple third-party beneficiaries is brought to court. In determining which third-party beneficiaries are intended, and which are incidental beneficiaries, the court is likely to apply the: a. fairness and equality rule. b. beneficiary test. c. reasonable person test. d. substantial performer rule.

c. reasonable person test.

Margaret signs a contract to purchase a new car, and on the back side of the agreement in fine print too small to read, Margaret agrees to waive her right to a jury trial and submit to mandatory arbitration, with Margaret paying all of the costs of arbitration in the event of a dispute. Margaret files suit over the condition of the vehicle, and the dealer files a motion to compel arbitration. The court will likely: a. require Margaret to pay all of the costs of arbitration. b. allow Margaret to return the vehicle to the dealer in return for the monies paid to the dealer. c. refuse to enforce the mandatory arbitration provision. d. enforce the mandatory arbitration provision.

c. refuse to enforce the mandatory arbitration provision.

To celebrate his seventeenth birthday, Alan buys a new computer. Two weeks later, his parents insist that he return it. Alan's attempt to return the computer will be: a. unsuccessful unless he gets court approval. b. successful, if he pays a fine. c. successful, because he has acted within a reasonable time. d. unsuccessful, because he has waited too long.

c. successful, because he has acted within a reasonable time.

Margaret applies for a position as a bank manager. On the application there is a section that asks if the applicant has any history of criminal charges involving money. In the past, Margaret faced embezzlement charges, but she does not disclose this to the bank in her application. If the bank hires Margaret and then finds out about her history: a. Margaret will be arrested and sent to jail. b. the bank will not be able to rescind the employment contract based on intent to deceive. c. the bank will be able to rescind the employment contract based on intent to deceive. d. Margaret will be able to keep her job, but will have to pay the bank a fine.

c. the bank will be able to rescind the employment contract based on intent to deceive.

Susan is extremely wealthy and has two daughters. She plans to split her estate equally between them when she dies. The older daughter, Mary, becomes Susan's sole caretaker when Susan begins to develop dementia. A few days before Susan dies, Mary convinces her to sell the home and property to Mary for a few hundred dollars so that the younger sister, Jane, gets nothing. Jane can claim that the contract between Susan and Mary is voidable based on: a. misrepresentation by conduct. b. fraudulent misrepresentation. c. undue influence. d. misrepresentation by silence.

c. undue influence.

Western Widget Co., Karelia Manufacturing Inc., and Johnson Industries Co. all enter into a contract to not recruit each other's employees, and to set coordinated prices for their products sold in the U.S. market for the next three years. This contract is: a. enforceable because it is not unconscionable against one or more of the parties. b. enforceable because it is not illegal. c. unenforceable because it is a restraint of trade. d. unenforceable because it involves an agreement between businesses.

c. unenforceable because it is a restraint of trade.

A court will use the doctrine of quasi contract in all of the following except: a. when justice requires that a party pay for a benefit it received. b. when one party has partially performed on an otherwise unenforceable contract. c. when a well-written contract is executed. d. when damages are not adequate.

c. when a well-written contract is executed.

Tiffany owns a health club and contracts to buy a set of weights from Dylan for $10,000. Dylan is hurting financially, so he changes the dollar amount on the contract to $18,000. Before delivering the weights, Dylan attempts to collect the $18,000 from Tiffany, who accuses him of trying to cheat her. She has a copy of the contract with the original amount. When they end up in court, the court likely: a. will enforce the contract for the original dollar amount. b. will not enforce the contract because there is a disagreement about the dollar amount. c. will not enforce the contract at all because of the change made by Dylan. d. will enforce the contract for $18,000.

c. will not enforce the contract at all because of the change made by Dylan.

Rudy and his publisher require Katherine's expertise in writing a chapter of a book that will be published under Rudy's name. They sign a contract in which Katherine agrees to write the chapter. If Katherine then delegates her obligation to write the chapter to Dana, the delegation: a. will be allowed based on the doctrine of alienation. b. will probably be effective, even though the duty involved personal services. c. will probably not be effective, because the duty involved personal services. d. is not a delegation at all; it is an assignment.

c. will probably not be effective, because the duty involved personal services.

Happy Animals, Inc., agrees to hire Lenna as a veterinarian now, provided she passes the required state exams within six months of employment. Their contract contains a:

condition subsequent

Sayed and Ann form a contract under which Sayed agrees to sell Ann 500 copies of a book. The contract price is $3.50 per book. Sayed breaches the contract by not delivering the books to Ann by the deadline. At the time of the breach, the books are available from the publisher for $4.50 each. Ann's damages are: a. $750. b. $1,650. c. $1,275. d. $500.

d. $500.

Which of the following would NOT be considered an exculpatory clause that a court would hold was contrary to public policy and therefore unenforceable? a. Exculpatory clauses found in rental agreements for commercial property b. Exculpatory clauses in residential property leases c. Exculpatory clauses in contracts with employees d. Exculpatory clauses in bungee jumping contracts

d. Exculpatory clauses in bungee jumping contracts

Which of the following cannot sue the promisor directly and have an expectation of winning the suit? a. Donee beneficiaries b. Credit beneficiaries c. Intended beneficiaries d. Incidental beneficiaries

d. Incidental beneficiaries

Douglas and Audrey promise to buy their twenty-year-old son, Max, a car when he turns twenty, provided he studies at least one hour every day during the school year. Max's best friends, Hayden and Jasmin, are very excited about the new car, and Max has told them that they can ride with him all over town once he gets it. Max fulfills his end of the bargain, but Douglas and Audrey change their mind and do not buy the car. Max, Hayden, and Jasmin all sue Douglas and Audrey for breach of contract. What is likely true? a. Max, Hayden, and Jasmin will lose. b. Max, Hayden, and Jasmin will win. c. Hayden and Jasmin will win, but Max will not. d. Max will win, but Hayden and Jasmin will not.

d. Max will win, but Hayden and Jasmin will not.

Which of the following is not one of the reasons that innocent parties prefer specific performance as an equitable remedy? a. It provides the exact bargain promised in the contract. b. It avoids problems of having to collect on the judgment. c. It avoids having to arrange another contract. d. No judge has to be involved. e. Actual performance may be more valuable than monetary damages.

d. No judge has to be involved.

Austin has a contract to sell 500 homemade teddy bears to Ally. The teddy bears typically sell for between $25 and $40. Austin delivers the bears to Ally but she refuses to pay, saying she changed her mind and that the contract is not valid because it is missing the price term. Did the price need to be specified in order for this contract to be valid? a. Yes, price is an essential term, so its absence in the writing invalidates the contract. b. No, price is not an essential term in any contract. c. Yes, price is the most important term in a contract for the sale of goods under the UCC, so it must be specified in this contract. d. No, price need not be included in a contract for the sale of goods under the UCC, so long as the quantity is specified.

d. No, price need not be included in a contract for the sale of goods under the UCC, so long as the quantity is specified.

Which of the following is not a type of discharge by operation of law? a. Material alteration of the contract b. Statute of limitations c. Bankruptcy d. Novation e. Impossibility f. Frustration of purpose

d. Novation

Which professionals do NOT need to be licensed to engage in legal and enforceable contracts? a. Architects b. Attorneys c. Electricians d. Tarot card readers e. Real estate brokers f. Accountants g. Stock brokers h. Physicians

d. Tarot card readers

Gmiendl, Inc., a German company, and Bordeaux Enterprises Co., a French company, verbally agree to a contract for the purchase and sale of plastic bottles. Assume both France and Germany are signatories to the CISG. Is the contract valid? a. No, because the contract requires a signature from each party whenever a multinational contract is formed. b. Yes, because the parties are from two different nations and no contract law applies. c. No, because the contract violates the Statute of Frauds and requires a writing. d. Yes, because the CISG does not require contracts for sale to be concluded or evidenced by writing.

d. Yes, because the CISG does not require contracts for sale to be concluded or evidenced by writing.

Antonio owns property on which a gasoline station once stood. Josh agrees to buy the land so that he can build an office on it. They include language in the contract making the purchase contingent on a determination that there are no environmental problems with the property. The contingency represents: a. a concurrent condition. b. an implied condition. c. a condition subsequent. d. a condition precedent.

d. a condition precedent.

Carmen contracted with Miles, who agreed to replace the carpets in her house. A clause in the contract provides that the only remedy for breach is replacement, repair, or refund of the purchase price. This type of provision in a contract is known as: a. a breach clause. b. an exculpatory clause. c. a penalty clause. d. a limitation-of-liability clause.

d. a limitation-of-liability clause.

Vince owes Colton $140,000 under a previous contract. Vince does not have the money but does own property worth approximately $140,000. Colton agrees to accept the property instead of the money and Vince transfers the property to him. The transfer is called: a. a rescission. b. an accord. c. a novation. d. a satisfaction.

d. a satisfaction.

Jocelyn hires Collin to paint the fence around her property. Collin is very busy and is owed a favor by Levi, another painter. Collin delegates his duty to paint the fence to Levi. This is: a. a valid delegation because any service can be delegated. b. not a valid delegation because it is a personal service. c. not a valid delegation because services are always personal in nature and cannot be delegated. d. a valid delegation because the duty is mechanical and nonpersonal in nature.

d. a valid delegation because the duty is mechanical and nonpersonal in nature.

Dustin's father, Forrest, enters into a life insurance contract that gives Dustin $75,000 when Forrest dies. Dustin is: a. a delegator. b. a substantial performer. c. an assignor. d. an intended third party beneficiary.

d. an intended third party beneficiary.

Heather is sixteen but looks much older. She goes into a jewelry store and buys a diamond bracelet with the money she has been saving for college. If Heather realizes a year later that it was unwise to spend the money on the bracelet, she: a. can return the bracelet, but she will only get 50 percent of what she paid for it. b. cannot return the bracelet, because she has kept it too long. c. can disaffirm this contract only if she has turned eighteen. d. can return the bracelet and get her money back.

d. can return the bracelet and get her money back.

Melissa is a minor who agrees to purchase a car from Umberto for $10,000, one month after she turns 18. Upon turning 18, Melissa writes to Umberto, stating that she still agrees to purchase the car. Melissa's contract with Umberto is: a. enforceable because Melissa and Umberto agreed to the purchase of a car. b. unenforceable because Melissa was a minor when she entered into the contract. c. unenforceable because Melissa has a right to disaffirm the contract. d. enforceable because it has been expressly ratified by Melissa.

d. enforceable because it has been expressly ratified by Melissa.

Under the common law, a memorandum evidencing an oral contract must include: a. a signature only. b. delivery terms only. c. quantity only. d. essential terms only.

d. essential terms only.

Vicky contracts with Cyrus to have him remodel her kitchen. Vicky, however, changes her mind and breaches the contract before Cyrus can begin work. As a remedy for the breach, Cyrus can seek: a. nothing, because the breach occurred before he began performance. b. the entire contract price. c. the contract price, plus interest. d. expected profits from the contract.

d. expected profits from the contract.

Sophie buys a tropical bird from Henry's bird store, which Henry says, "Is extremely rare." Sophie asks if the bird is on the endangered species list. Henry knows it is on the list, but he tells her it is not. Government officials later tell Sophie that she purchased a bird that individuals may not own, the bird is confiscated, and she is fined for possessing it. To recover the price of the bird and the cost of fines, Sophie can sue Henry for: a. negligence. b. undue influence. c. mistake, which allows the contract to be rescinded. d. fraudulent misrepresentation.

d. fraudulent misrepresentation.

Marcy owns a trucking company that hauls goods all over the country. Wilson contracts with Marcy's company to transport ten tractor-trailer loads of goods from Ohio to Texas. After delivery of the goods, Marcy learns that all the goods had been stolen when her company took possession of them. The contract: a. is unenforceable and Marcy's company is now liable for the stolen goods. b. is unenforceable because the goods had been stolen and Marcy's company cannot collect its fee. c. is unenforceable unless Marcy's company can return the goods. d. is enforceable because Marcy's company was justifiably ignorant of the fact that the goods had been stolen.

d. is enforceable because Marcy's company was justifiably ignorant of the fact that the goods had been stolen.

Shane and Diego have a signed contract for Shane to sell Diego some property in the mountains. Shane decides that he does not want to sell the property. Diego also decides that he does not want to buy the property. They meet to discuss it and agree, in writing, to rescind the contract. The rescission: a. must have additional consideration in order to be valid. b. is not valid because land deals cannot be rescinded. c. is not valid because rescissions must be oral. d. is supported by the promises not to enforce the original contract. Hide Feedback

d. is supported by the promises not to enforce the original contract. Hide Feedback

Brian wants to buy a mare which he can breed to help develop a horse-breeding operation. Larson offers to sell Brian a horse which he believes is healthy, and should make a good broodmare when a little older. After two years, the horse has not yet foaled. The veterinarian tells Brian that the horse is incapable of breeding. If Brian sues to rescind the contract with Larson, it is: a. likely that a court will allow the rescission based on a unilateral mistake. b. unlikely that a court will allow rescission based on a mistake of fact. c. unlikely that a court will allow rescission, because Brian made a mistake about market value. d. likely that a court will allow the rescission based on a mistake of fact.

d. likely that a court will allow the rescission based on a mistake of fact.

Mark sings bass for a famous jazz quartet, but he is feeling very tired from all his world travel. He decides to take a vacation and calls his friend Tristan, who is also a famous singer and can sing all the same notes. Tristan agrees to take Mark's place on a two-week tour of China so that Mark can take his much-needed vacation. They write up an agreement where Mark delegates his duty to perform with the group to Tristan. This is: a. not a valid delegation because services cannot be delegated. b. a valid delegation because Tristan is a professional singer capable of singing all of the parts. c. a valid delegation because it is in writing. d. not a valid delegation because Mark's performance is based on his personal skills.

d. not a valid delegation because Mark's performance is based on his personal skills.

Samantha, a famous artist, has a contract with Alec to paint his portrait for $6,000. Samantha is very busy and wants to delegate her duty to complete the painting to Patty, her top student and a very talented artist. If Alec objects, a court likely will: a. honor the delegation because, as a general rule, delegations are allowed. b. honor the delegation, only if the delegation was in writing. c. not honor the delegation because, as a general rule, delegations are not allowed. d. not honor the delegation because the contract is based on personal skill.

d. not honor the delegation because the contract is based on personal skill.

Johanna agrees to purchase Jessie's land so that she can build a golf course. They write a contract, and Johanna transfers the deed to Jessie. Jessie pays Johanna the entire purchase price. Johanna and Jessie have discharged their contract by: a. breach. b. lapse of time. c. concurrence. d. performance.

d. performance.

Elisa truly believes that she is a space alien from the planet Zelnor. She walks into a car dealership and buys a new Volkswagen Jetta, telling the salesperson that she needs a sample of Earthling transportation to beam back to her home planet. If Elisa wants the option to avoid her contract later, she must: a. prove that the car dealership did not take adequate precautions to prevent sales to mentally disturbed individuals. b. prove that the salesperson talked her into buying the car. c. prove that a court had judged her to be mentally incompetent previously. d. prove that she lacked adequate mental capacity when she bought the car.

d. prove that she lacked adequate mental capacity when she bought the car.

Matthew has a contract to sell a piece of real estate to Betty for $35,000. Matthew breaches the contract and decides to keep the property even though the market price is only $31,000. Betty can recover: a. nothing, because Matthew wanted to keep his land. b. $4,000 as the difference between the market price and the contract price. c. $35,000 as the contract price on the land. d. specific performance.

d. specific performance.

Jim contracted with United Technologies to install 5,000 feet of Rocketfish Cat-5e network cable in his new office building. United installed 5,000 feet of Dynex Cat-5e network cable instead. The types of cable are essentially the same. When Jim sued for breach of contract, the court likely found that United's actions constituted: a. complete performance. b. incomplete performance. c. material breach. d. substantial performance.

d. substantial performance.

In most states, when a seller of real estate breaches a contract and sells the land to someone else, the measure of compensatory damages is: a. the contract price. b. fifty percent of the contract price. c. the market price of the land. d. the difference between the market price and the contract price.

d. the difference between the market price and the contract price.

Gerald goes to a used car lot to buy a car. The salesman tells Gerald that these are "the very best cars in town for this price." Gerald buys a car for $6,500. Two weeks later, Gerald sees a much better car in a different car sales lot for $5,500. The salesman's pitch to Gerald: a. was an example of misrepresentation by silence. b. was an example of fraudulent misrepresentation. c. was an example of misrepresentation by conduct. d. was not an example of fraudulent misrepresentation.

d. was not an example of fraudulent misrepresentation.

Print Quik, Inc., seeks punitive damages in a lawsuit against Reddy Supply Company. Generally, punitive damages may be recovered when a contract has been breached: a. in almost all cases. b. only if the contract involved the sale of goods or the sale of land. c. in no circumstances. d. when the breaching party's actions also constitute a tort.

d. when the breaching party's actions also constitute a tort.

Garth purchases a boat from a boat manufacturer in another state. The sales contract contains all terms of the sale in great detail and at the end has the statement: "This agreement contains the entire agreement of the parties." If Garth later discovers a problem with the boat and sues for breach of contract, evidence extraneous to the contract: a. will be allowed in court because the contract was a fully integrated contract. b. will be allowed in court because the contract was not a fully integrated contract. c. will be allowed in court because Garth purchased the boat out of state. d. will not be allowed in court because the contract was a fully integrated contract.

d. will not be allowed in court because the contract was a fully integrated contract.

Equitable remedies do not include which one of the following? a. Rescission b. Restitution c. Reformation d. Specific performance e. Monetary damages

e. Monetary damages

When a party takes on a secondary obligation, that person is a ________ who will pay only if the primary party does not pay.

guarantor

The primary purpose of the writing requirement is to prevent harm to ________ by requiring written evidence of agreements concerning important transactions.

innocent parties

Silence normally ________ misrepresentation. However, if there is ____ defect or a(n) ________ relationship, then a seller _________ have a duty to speak.

is not, a latent, fiduciary, may

An element of fraud is that the deceived party must have had a _________ reason for relying on the misrepresentation.

justifiable

Generally, when minors act on their own, their parents are ___________

not liable for contracts made by their minor children

Statements of ______ or _______ about the future are generally not subject to fraud claims. Normally, this type of talk is called _________ and _______ legal.

option, predictions, puffery, is

Specific performance is __________ granted in contracts for ________ services because forcing someone to perform a personal service may be a form of _______

rarely, personal, involuntary servitute

The test for determining whether an oral contract is enforceable under the one-year rule is whether performance is ______________ within one year from the day after the date of the contract.

theoretically possible

When bargains are so oppressive that the court decides to relieve innocent parties of their duties, such bargains are deemed ___________

unconscionable

When one party makes a mistake as to a material fact, generally that contract is _________

unenforceable against the mistaken party

If parties enter into a contract with a covenant not to compete for valid reasons and in good faith, but the geographic and time constraints are _________ , some courts will _______ the contract to make them _______

unreasonable, reform, reasonable